Earning money has always been in our blood. People are inventive when it comes to trading. Some say that even Jesus’s foreskin was traded for silver coins a while after his death.

1600 years later trading progressed into more suitable assets. People in Holland sold their houses to trade tulips. Tulip traders thought that they had found a unique and long-lasting way to make money. Belief has always been a strong life force. In the 1720s the South Sea bubble was caused by an unrealistic belief in trade with Spanish colonies of South America. Unfortunately, the Spanish colonies underdelivered. In the 1980s in Japan the government launched a marvelous stimulus package that sent real estate and stock market prices to the moon, before bursting. In 2002 the strong belief in the so-called new economy consisting of hundreds of multi-billion-dollar internet companies turned into a financial crash. After the dot-com bubble investors wanted something more solid and put their trust in US real estate which also developed into a boom and bust. Investors may be able to handle volatility, but ordinary people may not invest in anything and believe that saving money in the bank is a good thing. The problem is that governments endlessly print money and drive inflation. What to do? Our money is broken.

It is scary that people in Holland believed strongly in tulips. Seriously?! Tulips! Well, I guess people were stupid back them. Farmers could grow perfect copies of tulips in the garden and sell them. Wait! When we zoom out and look at what we are doing right now we might be equally stupid. Now days instead of growing tulips we can mine bitcoin in our garage. At least a tulip is nice to look at, but we really have nothing when we buy bitcoin and electricity is cut. Greed seems to make us irrational.

Do not get me wrong. I believe in bitcoin and the blockchain technology. But I believe it’s healthy to ask if I am making the same mistake as people have throughout history. Is crypto trading based on the premise that someone stupid is buying from someone who is less stupid? Are we all morons?

The key issue is what really provides value to something. We put our trust in the government saying that a currency (fiat money) has value. But who says crypto currencies has value? A lot of people, companies, institutions and even countries do. Something is valuable and tradable if two or more people believe something is valuable. It’s as simple as that.

It is easy to see the value of gold as it has been traded for over 5000 years and it’s one of the most desired and useful metals in the world. The value of something digital is harder to see, but considering that our lives are increasingly moving into the digital world we need to rethink our perspective of value. Afterall, we need to be ready for the future.

Hang on! This is exactly what they thought in Holland when they believed in trading with tulips. They believed it was something truly unique. Crypto sceptics may say that its like the way we look at blockchain technology.

But I would argue that things really are different in today’s digital world. It’s a fact that we are digital. Internet will transform into web 3 and not go away. Even I might be forced to get an avatar for my online existence. Our online lives will develop into a multi-trillion-dollar industry. It does not take a dummy to believe that digital assets will have a significant part of our lives in the future.

For example. The intrinsic value of our future selves online is difficult to see since we cannot see what is not yet created. But it’s jaw dropping to learn that the second largest phone company in the world is looking to store our DNA online and to link it to our avatar. Imaging yourself with your unique DNA in the metaverse. We will be legally responsible for our online existence. Furthermore, our avatar will clearly be important to us if our DNA is linked to our avatar. Something that is important to us has value. But how do we stop greed from completely wrecking us?

As digital assets solve problems online and in real life, they clearly have more value than tulips. But nothing seems to stop greed from increasing prices and trading with crypto is no exception. Greed is clearly showing its face in crypto as multiple crypto exchanges have used leverage trading to finance their business. Being greedy is like going on a flight to the moon with half a tank. We might get there. If not, we crash. In all financial bubbles greed has played a part in driving prices to the sky.

Perhaps the biggest lesson from previous financial bubbles is that greed is part of our social construct. Sometimes I wonder if it’s a part of our DNA.

It seems that the engine of a crypto bull market is greed as we need it for prices to go up to astronomic levels. To avoid making the same idiotic mistakes repeatedly we must do what seem to be against our nature. We need to act in the opposite way of the public. As the says goes “buy in the red and sell in the green”. That is the way to hinder bubbles from bursting